Welfare, work experience, and economic self-sufficiency

The potential of former AFDC recipients to earn a living wage is central to the suc-cess of welfare-to-work programs. Previous studies have found that welfare recipi-ents see little increase in their wages over time. Low wage growth could arise fromeither low returns to work experience or low levels of experience. This distinction isimportant for designing effective welfare policy. In the following paper, we estimatehow wages grew with work experience between 1978 and 1992 for a national sampleof women from the National Longitudinal Survey of Youth. We compare womenwho never received welfare with both short- and long-term recipients in order to seeto what extent the rates of wage growth with work experience differ. We find thatthey differ very little. We use numerous specification checks to test the robustness ofour results and find consistent evidence that the wages of AFDC recipients grew at arate similar to those of nonrecipients once work experience is taken into account.